Quantifying the Impact of Multi-area Policies on Operational Reserve Adequacy and Market Prices: a Sequential Monte Carlo-based Approach

This paper addresses the challenges of integrating large shares of renewable energy sources into the power system, focusing on managing operational reserves in multi-area systems and their long-term adequacy. Unlike previous studies, this paper investigates the long-term impact of procurement and activation of operational reserve in adjacent areas, considering energy scheduling and interconnection line constraints. Three procurement schemes for multi-area energy and reserve exchanges are proposed and analyzed through Sequential Monte Carlo Simulation. These schemes vary in their approach to interconnection line capacity constraints and the simultaneous or phased procurement of energy and synchronized reserve. The mathematical operationalization of these schemes is achieved through simple linear programming models, facilitating the quantification of marginal prices for both products. The impact of these schemes on operational reserve adequacy, marginal prices, and interconnection line utilization is demonstrated using configurations of the IEEE RTS 96 system. This analysis incorporates long-term uncertainty and diverse operational conditions and provides valuable insights into the interplay between energy and reserve procurement strategies in multi-area systems.